This founder shares his churn problem (with Adam Robinson)

Everyone talks openly about raising a new round or closing a massive deal. But churn, crickets. Except for one guy, Adam Robinson.

And he shares not only his churn problem, but how he solved it, how he's building a solid awareness engine and, how he built Rb2b.

• (00:00) - Introduction
• (07:02) - October 2022, the first LinkedIn post
• (08:53) - Finding his voice
• (11:15) - The first viral post
• (13:51) - No product was decided yet
• (16:05) - The product was not exciting...
• (17:59) - 3 weeks after launch
• (22:58) - The Impact of Transparency on Business
• (23:49) - Churn: The thing people won't talk about (when it's bad)
• (27:23) - Churn spiked to 15%
• (29:49) - A few realizations
• (36:37) - The strange issue
• (45:05) - Confrontational Marketing
• (48:10) - Final Thoughts and Farewell

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Creators & Guests

Host

Mikkel Plaehn

Marketing leader & b2b saas nerd

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

Guest

Adam Robinson

CEO @ Retention.com & RB2B

What is The Revenue Formula?

This podcast is about scaling tech startups.

Hosted by Toni Hohlbein & Mikkel Plaehn, together they look at the full funnel.

With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.

If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.

[00:00:00] Toni: No one likes to admit that they have a churn problem. Today, we get someone to share not only their problem, but also how they actually it.
[00:00:11] Adam: And that made our churn spike to like 15 or 16 percent per month from like 10. Right. But I was like, Oh, here's an opportunity to like, really be dramatic about like a shockingly large churn number and get a ton of attention, be super brutally honest about it all, and then get a ton of feedback
[00:00:28] Toni: That's Adam Robinson. And what did do when churn
[00:00:33] spiked? posted about it on LinkedIn.
[00:00:36] Adam: again, like we're back to like 10 or 10 and a half percent, but like when an opportunity prevents itself to do something that is shocking, shocking things will break through. the amazing thing about that post was 393 people wrote me that canceled and told me why, right Like the, the, the, the amount of time it would have taken to accumulate that level of intelligence, if it
[00:00:56] was done through a product person and meetings and like, whatever. I don't even know if you could have over the course of a year. Right.
[00:01:02] Toni: Before we jump into the show, today's episode is brought to you by EverStage, the top rated sales commissions platform on G2, Gartner, Peer Insights,
[00:01:12] and Trust Radius with more than 2000 reviews from customers like Diligent, Wiley,
[00:01:18] Trimble, and more. Visit everstage.com and mention Revenue Formula to unlock a personalized sales compensation strategy session with one of Everstage's top RevOps experts.
[00:01:31] And now, enjoy the show,
[00:01:33] Mikkel: That's it. So we're kind of, I don't know, you've probably never watched this show before. I'm assuming here. Or did you check us out? Did you have a chance? Yeah, no, I, I just do a, I just have a lot going on right now. I don't spend, you know, I don't, 90 percent of my social media time or 95 is spent actually just writing posts. I don't actually spend time doing other stuff cause I just can't.
[00:01:57] And I think that's a, I think that's a rookie parent answer because what you could have said is, Hey, I just had a kid. Sorry. Yeah. I'm not sleeping much. So that's that's a
[00:02:07] Toni: he's in America, you know He doesn't
[00:02:09] Mikkel: this is not part of the excuse
[00:02:11] Adam: All right. Yeah.
[00:02:13] Mikkel: fired and I mean we're usually we sit in this amazing studio Perfectly lit and everything right now.
[00:02:19] We're sitting in a room. That's undergoing construction.
[00:02:22] Toni: Yeah at the moment. It's my it's my
[00:02:24] Mikkel: attic
[00:02:26] Toni: In my attic.
[00:02:27] Mikkel: This is a very posh very posh attic for sure So, I mean we're sitting here for the first time and we're talking with a builder and you know, we're going to talk a bit about building. That's the introduction?
[00:02:38] That's, I don't know. It's terrible. I told you I don't have much today. Hey, I have three kids. I have three kids.
[00:02:44] Toni: Three kids, two kids, two kids. Yes, we have a couple of that. No, actually. So what we, what we have found out, uh, because we do talk about kids for some reason, a a lot of our listeners that don't have kids.
[00:02:55] They basically told us that they listened to us and therefore made the decision to never have kids like that's that's
[00:03:02] Adam: that, that, yeah, that can happen. I thought I didn't want, I didn't have kids till I was 42 years old. I resisted a long time in my late thirties. I was like, nah, I don't really need it. But then, you know, I met the right person and then you get married and then you have kids. Yeah.
[00:03:18] Toni: Yeah.
[00:03:18] I mean, you can't, at some point you just can't do anything about it. It's called bartering. Yeah.
[00:03:21] Mikkel: Yeah.
[00:03:24] Adam: is just too strong to
[00:03:26] Mikkel: Yeah. Yeah. No, that's it. But I mean, you've also put a couple of other babies into this world. One is retention. com. and the other one, which we're going to focus a bit on today is RB2B. I think what would be really cool, Adam, is maybe just to hear this story.
[00:03:42] Obviously this company has grown really, really fast to, I think about where you're at now. 3 million, AR.
[00:03:49] Adam: yeah, it's like eight, eight months and seven days in and we're, we'll probably hit 4 million ARR today.
[00:03:55] Toni: Jesus.
[00:03:56] Mikkel: Amazing. Congrats. I think what would be really great is for those who, you know, maybe doesn't know the company, know you, you that well, just to hear what's happened in that time. Like, how did you build that company up until the point it is now?
[00:04:10] Adam: Have you heard of the blog post a thousand true fans by Kevin Kelly? So like, that's like a nice idea. But who, who starts there? You know what I mean? Like, like there's this idea that like, Oh yeah, like go out and build an audience and then you can like sell whatever into the audience. but that actually, with this startup, that's like what happened.
[00:04:32] And it wasn't even really that intentional. I, my other company, retention. com, In the middle of 2022. So like we're at the end of 2024 right now. So two and a half years ago, we were like, call it, we were like 10 or 11 million ARR with six people. And that, that happened over like three years. we, we had honed in on an ICP, big Shopify stores.
[00:04:56] I was looking at Klaviyo, who's about to go public and their metrics are absolutely incredible on every, every single way you could look at them. And I was like, Oh, like we have a product that has almost, it's like low single digit penetration into this market. It's, it's. It's just crushing it for all of these big stores. the inbounds crazy, we have like, we had Klaviyo sales metrics. Like they have like a 70 percent close rate if it hits the AE. So it was like, we had something crazy like that. 70, 80 percent close rate, seven day deal. We were doing these 30K CV annual contracts. And I was like, holy shit. Like, this is Klaviyo, you know, like, Oh my God, this is unbelievable.
[00:05:35] So, I was like. I need to hire a team and then I just viewed it as an awareness problem. You know, like the, the one, once we just said what we did, all of these stores, once they knew who was working with us and how well it was working, it was like, how do I, you know what I mean? Like, it was just this magic, right? so I was like, okay. How do you, what's, what is the quickest way to spread awareness in the world today?
[00:05:59] No question. It's building in my mind. No question is building a personal profile on social media. No question. Like it's 10 times more effective than building a brand profile. So then it was like, okay, I got to do that.
[00:06:10] I never done it before. It was like, how, you know, I had some, some, some paralysis there. And then, you know, there's another company in the Shopify space. Like we were growing off of word of mouth and cold email. There was another company called triple whale. Who's growing off of word of mouth and Twitter.
[00:06:25] So I went to them, they had an office in Austin. I was like, guys, like, can I show you how to do this email thing? Show me how to do the social media thing. And their social media guy's like, yeah. I think it's like, where do we start? He's like, well, Twitter is super competitive. I think you should start on LinkedIn, get 10, 20, 000 followers, and then go try to crack the Twitter game.
[00:06:41] Cause it's just going to be harder because like only, I think even still only like 2 percent of active LinkedIn users create content. So it's like. You know, if your user, if your audience is super active on LinkedIn, there is a very favorable creator, creator to consumer dynamic that doesn't exist really anywhere else.
[00:07:00] So that was a plan.
[00:07:02] so I did my first LinkedIn post in October of 2022. And it really took a year for it to like click and it clicked when I, so like Meanwhile, We hone in on this Shopify ICP. I like call my shot that we're going to go 15 to 50 million error. I make a docuseries about it.
[00:07:25] And like 2023 was just a disaster. It was like super hard for e comm SaaS, super hard for every SaaS. Like we were overselling people for five months. Didn't realize it. Like people are renewing these deals that I thought we were going to get expansion and like, I'm being so loud about everything, like five competitors show up and we're getting contraction at the renewals.
[00:07:43] It was just like, Every, you know, the, the pain that I know companies like Outreach, Six Cents, Demandbase or whatever are feeling right now, who like really benefited from that zero interest rate policy. None of them are growing. They're all either stuck in the mud or shrinking. And it's sad because they raised these huge valuations and you can't raise it 20 times revenue and shrink ever.
[00:08:12] Or you're done, right? Like, I don't even know what they're going to do. It's like, they're zombies. They're going to have these like weird take under, you know, Vista sales loft drift kind of thing. Right. so like that really sucks if you're them and you have stock in those companies and your employees or like whatever, cause like it's, they're all less than the value of the money that's been put in, right.
[00:08:30] All of them. And, but like for us, we were bootstrapped. Like I didn't raise any money. So. you know, I built this team for like a hundred millionaire, our company. And like, over the course of the following 12 months, we just like got it to, it's, you know, it's, it's kind of like at the same place it was, we kind of dipped and got back, but like now I got half the team size, you know?
[00:08:49] So like this business is cranking out 10 million bucks or whatever, which is like a wonderful thing to own.
[00:08:53] So, That was just backstory on retention. com. LinkedIn for retention. com and Dave Gearhart on my show on Tuesday, corrected me here. I could not get my, I had not found my voice for e commerce after a year.
[00:09:10] I'd gotten pretty good. It was doing a lot of very positive things for us. Like it really created. A brand in the Shopify ecosystem, which is super important. Agencies need to know who you are. You know, the other vendors need to know who you are. Like everyone needs to like be okaying you and blessing your use by all of these big brands.
[00:09:28] It did that. What it did not do was it did not directly drive leads, right? It wasn't doing that. And then, my excuse, which Gerhardt tells me that I'm wrong. And he's right because like, he actually, for Ben Jobway, this guy who we work for at Privy, he actually. Found that guy's voice for EECOM and that guy's not an EECOM guy.
[00:09:50] He's a SAS guy. So, I just hadn't found my angle yet and Santosh, my COO is a B2B data guy. He's like, dude, he'd been pushing me entire time. He's like, we got to make this for B2B because if it works for selling a hundred dollar pair of shoes, it's going to work for selling 50, 000 software, which we can go into that later because there's an interesting churn conversation.
[00:10:13] But that was the original thought. And like, it's hard to argue with, like intuitively, it makes a lot of sense. and. 2023 was such a disaster that I'm like, dude, we're not ready. We got to clean this situation up before we like go do something completely different. So around Labor Day, meanwhile, we did a big downsizing of our sales team in 2023.
[00:10:34] And I wrote a post about it and it was just a banger. It was like, you know, I was
[00:10:38] Mikkel: Yeah. Remember that
[00:10:39] Adam: and it got a thousand likes. Right. And I'm like, that's interesting. And then people started talking to me about this BDR pain that everybody was having in 2023, who was like in this sales and marketing space. so I go to Alec, my LinkedIn consultant, I'm like, dude. Santos wants to do this B2B thing. Can we just like, see if I can write to this B2B audience? Cause like, I'm curious, you know? And he's like, yeah, why not? What do you want to do? Half and half? I'm like, let's just go like whole hog for like the month of September in 2023 and just see what happens.
[00:11:13] And I'm not kidding you. So like.
[00:11:15] I wrote one post about what I had been hearing about BDR from everybody and it not working for anyone. And either they had cut their teams or they were thinking about it, right. In VC, in any, anything related to tech. So it's like the eight things I'm hearing, right. That one got 3000 likes.
[00:11:32] I was like, what? So then I'm starting to get a sense for like what a hot take was. I never could conceptualize it, but I'm like, okay, so this is stuff that like people are afraid to admit to themselves because they're going to have to fire a bunch of people and ruin a bunch of people's lives. It's something that you might say to your spouse behind closed doors, right?
[00:11:54] Like I'm starting, but still I'm like, okay, was I just lucky? Right. So like there's this moment. Last year over Labor Day, which is like beginning of September, end of August, I was in Santa Fe with my wife, my kid, and my friends who have a kid too. meanwhile, the prior week, I was just so like, my head was spinning cause I just had this viral thing happen for the first time, you know?
[00:12:14] And I thought I kind of knew why, but I like, wasn't sure. And then we had an eight o'clock dinner and I always sit down and write all my posts at once. It's like, you know, hour and a half, two hours. I knocked three out for the week. So like I write these three posts and then we're walking to dinner. I'm like, man, guys, like.
[00:12:31] If these are bangers and I think they are, then like, I know what LinkedIn wants from me, you know, like I know how to write viral posts. If they're not, then I'm exactly where I was a year ago. I still have no, no fucking idea. Right. Like, because if these are not bangers, then everything that I thought about why the last one was a banger was just wrong.
[00:12:54] It was luck. Right. So then bang, bang, bang over the course of the week, it was like 2 million impressions across three posts. They were all this, like. You're not going to believe it. You know, we, we, we fired all of our BDRs and our growth grew up. Like, so yeah. at that moment I was like, I just remember calling Diana who just called me, my, my co founder and I was like, man, I can write these posts.
[00:13:16] Like I know what's going on here. Right. Like, and over the last year until this call on Tuesday, I'm like, It's magical to have the alignment of you being your ICP and your ICP being, living on a social media network. I think Gerhard's argument is like, it's easier, but it's not necessarily magical. I mean, it is magical if you're willing to do what I'm doing.
[00:13:43] Anyway, there's a content market fit thing that if you are your ICP, you're going to be able to do it. A lot can happen for you. That doesn't happen if you're not right.
[00:13:51] Toni: I kind of have a question kind of jumping into this, right? So we're talking about. Your, your content market fit journey, actually, and kind of finding your voice on LinkedIn and then building this audience on a, on, on LinkedIn to a, to a B2B crowd, basically. I'm assuming
[00:14:04] Adam: And by the way, we hadn't even decided to make the product yet. This was
[00:14:07] Toni: that's actually, that's actually my point.
[00:14:09] That's actually my point here. It's like you built this audience, and from what I could gather, like, you know, RB2B hasn't been, uh, conceived yet at that point. Right. And, and you know, basically was that then the, was that then uh, where those, the steps like, okay, we have this audience where there's retention.
[00:14:28] com thing, how can we merge those two
[00:14:30] Adam: the audience yet. We didn't even have the audience yet. So like that week, my followers, I'd built it up from like zero to 20, 000 over a year. They went to 40, 000 in seven days. And. And then I was like, holy cow, I know what to do here. We need to start making this product.
[00:14:47] So the audience wasn't even there. I built it while we were building the product. And then these posts were so amazing. And they were so, they spread so far and wide, like we, you know, I'm all about this, like customer discovery, , build your buyers. The best scenario is you can sell something before you even start building it.
[00:15:09] Mikkel: Yep.
[00:15:10] Adam: That wasn't exactly what happened with this, but we were able to, to have like, 300 discovery calls between October and March when we launched a product just off of like very soft closes and in posts that were like things like, Oh, you know, I talked to like 20 CMOs about demandbase and 6sense, not a single one of them.
[00:15:33] Like had said anything positive. Like, here's the six truths about this, you know, dubious product category. Right. And then it just, it's like, by the way, if you want to like close the loop on IBM and talk about person level website, visitor identity, hit me up, you know. And like 200 people read it. So, so yeah, it was literally like audience first, which like, I don't want to say I fell into it, but like, I don't know, I kind of fell into it.
[00:15:59] It was like everything worked out perfectly. Did I have this explosive thing happened?
[00:16:05] And then, and then by the way, like the product that we thought we were building was not what it ended up being. And people were not that excited about it in the beginning. We like gave them a pick during this October to March period, we very quickly just made like a pixel that sent a spreadsheet every day of data.
[00:16:22] And like, I couldn't get people to buy that. Like they were not, I'm like, you wouldn't, you know, would you pay 500 bucks? It's like yeah. Would you pay 1. 99? It's like, maybe, you know, then there was a magic,
[00:16:36] yeah. there was a magic moment with actually pushing people, pushing the LinkedIn URL with a headshot into Slack, and then when I held my phone up at like parties and I was like, this person is on retention.
[00:16:48] com website right now, then it was like, holy shit, you know, like people were like, is that for sale? Like, how do I get that? So. Then I was like, okay, there's so much viral. I was first thinking like, let's do sales led because intent is a high churn product category, which we can go in later. So I'm, I wanna go for a lower churn buyer persona first.
[00:17:11] But there was so much virality in the content that I thought that I would benefit from the virality of a free offer so much more than someone who didn't have the, the viral content aspect. And they would like kind of work off of each other. and there's this other dynamic where. It's not that sketchy anymore after eight months, but like, it was still a weird, you know, they had been being told by Demandbase and 6Sense and Terminus or whatever, that like, you can't do this.
[00:17:40] Which like legally you can, you know, there's like this self regulatory governing board called the IAB in the U S that says you shouldn't do this. But like nobody who buys from me even knows what that is. They just know they've been told to not do it. And when I'm like, well, here's the law that says you can, and until it changes, why wouldn't you do this?
[00:17:58] Right. So,
[00:17:59] Toni: because you have mentioning 6sense now a couple of times, I forgot where this was on the timeline, but when did,
[00:18:05] when did that
[00:18:06] Adam: launch, yeah, three, three, three weeks after we launched, it was just the most amazing thing that's ever happened ever. I sort of, instigated it, you know,
[00:18:15] Mikkel: So wait, wait, wait, you got a cease and desist letter. And this is the most amazing thing that,
[00:18:19] Adam: Ever, ever
[00:18:20] Mikkel: like, yeah,
[00:18:20] Adam: it's probably a pivotal moment of my career, actually. The,
[00:18:23] yeah,
[00:18:24] like the, the short story is like, we bought their products to compare it to ours, which was really interesting. Cause there's between any of these tools, there's very little overlap because people are doing identity differently and their databases are slightly different.
[00:18:37] So like, and then, and then actually the, the, the percentage of ideal customer profile visitors of anyone's web traffic is so low. That if you have low ish overlap, you'll have virtually no ICP overlap, which is just a really interesting thing. So anyway, I bought their product to just see what the output was.
[00:18:59] And then six months in, in mind, you like I'm going through the most epic pain, contracting renewals, like cancellations, like, you know, people just beating us up about price, like left, right, and center. I know the environment for SAS. It's like. Nobody is doing what they were able to do in 2020 with price.
[00:19:23] As far as I can tell, right? Like it's just the opposite now, like zoom info is shrinking. Who's like the King of just like, I'm going to stick it to you and double your price this year and you can't go anywhere else. Right. maybe Salesforce still has some leverage maybe, but like, nobody else. And they're not raising, they're just trying to keep people, people the same.
[00:19:40] Right. So these guys call us up and it wasn't even me. It was our RevOps guy. They call the RevOps guy up and they're like, Hey, we're going to triple the price of this, but like, if you sign a deal today, we'll keep it the same. And I was like, I was like, are you fucking kidding me? In 2023, you have the audacity to have that conversation.
[00:20:03] And this is like, all of us are just like, so if we raise the price of our product and Shopify guys by a dollar, they would literally, they would burn us at the stake. Like they would, you know what I
[00:20:16] Mikkel: There'll be picketers
[00:20:18] Adam: you, I'm like, and then of course they come back the next day. They're like, yeah, they're like, okay.
[00:20:23] You know, if you, if you sign, if you sign the deal today, we'll keep it the same. And I was like, you are such fucking scumbag. So like, I just like wrote a post that is ridiculous about how they did that and like why they're afraid of me and don't want me using their product. Totally absurd. Right? Like, I'm like, they know their data is terrible.
[00:20:44] You know, they know that I'm going to like come from the bottom and make them go bankrupt and all this crap. And then like, you know, We're in a new world with like this influencer thing and like how much power people have. And by the way, they're hated, which is like really important. Like there's a,
[00:20:58] Mikkel: Helpful.
[00:20:58] Adam: big, there's a deep under, like if, if this was Klaviyo in the Shopify space, I never could have done this because people love Klaviyo.
[00:21:05] But like so many people have been smoked by 6Sense that they've, it's ruined their careers, right?
[00:21:11] They bet on this thing. And then as the marketer, and then the sales team's like, we've never gotten a good lead. All of their plays don't work. Like this is absurd. And then the CEO's like. And we spent 250, 000 a year on this and signed a three year deal.
[00:21:24] What the fuck?
[00:21:24] So like a bunch of people have been smoked on it. So they went with the old school playbook, which they, which a big company always does, they send the person who's talking shit online and cease and desist. And typically somebody's like, I'm sorry. And the cease and desist demanded, it was crazy what it demanded.
[00:21:43] Like, because that post, that post popped, there were 500 comments, all saying fucks make sense basically. And the post, it was like, say you're sorry, you know, take the post down, say you're sorry and tag every single person who commented in the post. Right. So like, like I couldn't even do that if I wanted to.
[00:22:00] Right. So, so, I called my, my lawyer and I'm like, Hey, like, If I get sued, what is the maximum financial liability? He's like, it's 99 percent bullshit, but like there is, you're not supposed to talk about price. You sign a contract, like maybe some judge somewhere is like, you know, finds you a couple hundred thousand dollars for that or something.
[00:22:19] But it would be maximum a few hundred grand over a few years. Right. I'm like, I'm like, and that's the worst that can happen. If I post the actual cease and desist on LinkedIn, he's like, yep, that's the worst. And he's like, I, I wouldn't advise you to do
[00:22:33] Mikkel: Yeah, of
[00:22:35] Adam: the madness, you know, like I get it.
[00:22:38] And then, and then, Yeah, I just like, I posted the cease and desist and I rewrote the last post that they cease and desist. And I was like, I still think this, you
[00:22:47] Mikkel: Yeah,
[00:22:48] Adam: and it was just so epic. And like, it went from like me being some guy on LinkedIn to like, Everyone really understanding who I am, what I'm doing and what my
[00:22:58] company does.
[00:22:59] Right. Especially these six people who are, you know, they're not our customers yet, which, you know, cause it's our products unusable for them right now, but like they will be in a couple Of years. Right. We'll. You know, so it was, it was, it, and it just put us on a trajectory,
[00:23:14] you know, it just accelerated everything so much, you know, like,
[00:23:18] Mikkel: I think you also kind of mentioned, churn kind of started happening a little bit. Right. And you've been super transparent. I think this is also, by the way, one of the reasons all your content works so well is there, it feels like there's nothing you won't say. right. Maybe family you keep kind of separate from this realm,
[00:23:32] Adam: yeah. My
[00:23:33] Mikkel: fair, but you feel, yeah, yeah.
[00:23:34] But you feel,
[00:23:35] Adam: you
[00:23:35] know, I made that docuseries. She's like, stop putting your fucking baby in this
[00:23:39] Mikkel: Yeah.
[00:23:40] Adam: Like, you know, she's like, get it out of the house. Like, I don't want to be in your stupid documentary. Like, if you want to do it, do it on your own time. Don't do it around here. I'm like, all right, fine.
[00:23:49] Mikkel: But I think that's also exactly actually why we wanted you on the show, because, and the three of us were talking a bit about it before we hit record, which is no one really wants to talk about churn, except if it's great. You know, they have really low churn in this scenario. Everyone is
[00:24:02] Toni: super transparent about the last funding event.
[00:24:04] And hey, we hit a hundred million in AI. Like, you know, everyone is super transparent about the great things that are happening. Right. But what makes. I think you're transparent pose really interesting is, okay, this guy is serious. It's like 20 plus million. So this is not, Oh, we just signed our first three customers and you know, one isn't going so well kind of level kind of, it's, it's further than that. and then you also really don't have any problems pointing out stuff. Arguably you as a CEO are, are the reason of why this is not working out. Right. So it's kind of very, you're not blaming you yet. This is what it is. Right. You're not blaming you yet. And, and, uh, and this is just fantastic. Yeah. This is what people are loving to see about it.
[00:24:42] Right. And I'm sure there's a bunch of haters and, and, and blame us and stuff, but, but ultimately I think this is what makes it so interesting. Right. And recently, one of the things that we wanted to dig in a little bit today Well, you have pointed out this, I think, for a while, but the, the new product that grew from zero to 4 million in those, what, seven months, basically has a fairly large churn problem,
[00:25:03] right?
[00:25:03] The
[00:25:03] churn
[00:25:04] Adam: a year. It's, you wouldn't even consider it a SaaS in its current state.
[00:25:07] Toni: yeah, no, I know. I
[00:25:08] know. So this was actually one of, this was one of my first questions was, uh, how do you calculate that number? Because you can calculate it in so many different ways. you know, from my perspective, being a little bit nerdy about this actually, kind of how do you get to the 10, 15 percent that you, uh, that you're posting?
[00:25:26] Adam: yeah. So I just look at this barometrics dashboard. There's this guy named Nathan Barry, who's got a company called ConvertKit. He always had a barometrics. He, you could just go to his public barometrics dashboard whenever you wanted. I would look at it once a quarter at least and just get, you know, jealous.
[00:25:41] And, you know, so, so I always wanted to do that. And I couldn't ever with my last company because of like. nobody would let me post it because the churn was so bad.
[00:25:51] Mikkel: Yeah. Yeah.
[00:25:53] Adam: care. I'm doing it from day one. Like, I just know, I know my content is good because it's what I wanted to see from drift in 2019 when I, before I launched.
[00:26:05] Retention. com. They were like, so hot, growing so fast, they were putting out such dope shit, but I really wanted to know how they were doing it. You know what I mean? It's like, what are your metrics on all this? What channels are you using? How much are you spending on this? Like, how much does it cost to get Wiley to produce a book, right?
[00:26:22] Like, all this stuff. And then, You know, I know that that having a public dashboard, like that's super addictive for people because I was addicted to the ConvertKit guy. Right. And it's kind of like the, the, the me telling the story of this company is so deeply intertwined with marketing the company itself, that it's just like, it's such an easy way.
[00:26:44] To just get people coming back and grow the affinity and get attachments and story and all that stuff. So that's why I do that. And the way bear metrics calculates it is they just look at, you know, if it's users, it's like users canceled, divided by user base 30 days ago. It's pretty
[00:27:01] simple.
[00:27:02] Toni: So basically within the same, within the same month, and I guess kind of, that's also with the, Then with a dollar churn, basically it's the
[00:27:08] Adam: Yeah. the dollar turns, like how much dollar did you drop over the dollar you had 30 days
[00:27:12] Toni: Got it. Got it. Yes. So, and I think maybe, maybe you want to mention the numbers. So we have pretty, you know, well educated folks in terms of kind of those churn numbers around.
[00:27:21] Adam: I don't even want to talk about it
[00:27:23] So bad, but like, When I, when I, so, so really this will give you an idea of how I think about things, social media, marketing, getting attention or whatever. 11XAI has just been in the news for,
[00:27:37] Mikkel: Yep.
[00:27:39] Adam: so he has a hundred accounts with us. And he churned 80 of them and put them all in one agency account.
[00:27:45] And that made our churn spike to like 15 or 16 percent per month from like 10. Right. But I was like, Oh, here's an opportunity to like, really be dramatic about like a shockingly large churn number and get a ton of attention, be super brutally honest about it all, and then get a ton of feedback in a post.
[00:28:05] Right. Like, like this is kind of like a 6Sense thing. I'm like, here's an opportunity. To really put out something shocking that is still true, but just shocking, right? Like how is this company at three and a half million ARR and churning 15 percent per month? That doesn't even make sense. So, so again, like we're back to like 10 or 10 and a half percent, but like that was, that was, I would encourage people to think about social media that way.
[00:28:32] It's like when you, when an opportunity prevents itself to do something that is shocking, shocking things will break through. Period. Right. So, the amazing thing about that post was 393 people wrote me that canceled and told me why, right Like the, the, the, the amount of time it would have taken to accumulate that level of intelligence, if it was done through a product person and meetings and like, whatever.
[00:28:55] I don't even know if you could have over the course of a year. Right. and like now, you know, I put out a follow up piece to it. I'm like, okay, so like. I actually think we have quite good product market fit with our free users who have barely any traffic, because they're just like euphoric about being able to see these people on their site and they don't really need to do anything with it and they're not paying for it.
[00:29:19] So it's just this incredible viral thing. Right. And then there's companies like Rippling Ramp and like whoever we, they inbound us and they like buy their growth team buys this feed and they know what to do with it. And we're just, we just like price it cheap to like do a fast deal. And there's actually a pretty good product market fit with them because you know, whatever they like run it through clay or they do whatever they do. and then I think our, our ICP is actually a company like my other company, retention. com.
[00:29:49] I had a few realizations. One, like so there's been these, company level identity products for a long time. I think the way they're speaking about it was wrong, which led me to speak about it wrong.
[00:30:01] When someone hits your website for the first time, that's not a lead. It's like way, it's like a very large distance from a lead. Right. And that's really only one of many use cases of this signal. it's not a lead. It's a signal. I was talking about it in terms of leads and demos. So I was getting people to evaluate that in the workflow is leads and demos, and people are evaluating it based on leads and demos.
[00:30:26] My team is super motivated to make this work because like, you know, the girl running retention. com has 10 percent of the whole company. So like she needs to make it work there. Each salesperson is getting one to two wins per day that are super interesting that are not demos. I'm setting the standard of success for this as demos.
[00:30:50] And. I think, you know, so there's basically like what I learned was that was a huge problem. And then there's this other massive filtering and routing problem for people that have salespeople where it's just unusable for a growth stage SaaS with the sales team, who I think ultimately are our paying customers.
[00:31:06] So, you know, what we think will solve most of this is if we run these signals through HubSpot, get them tagged with a rep and then send it to the Slack channel with the rep tagged, which. Alerts them in Slack rather than just this fight. Cause it's like, if you get more than 20 leads per day, it's like most your traffic's crap.
[00:31:31] It's really frustrating to sort through crap. You know what I mean?
[00:31:36] And if you're only sending one, one person each time, it's just not a good, you know, it's not a good product for them. And the marketer's trying to like assess whether this is a good product or not based upon like seeing it or like trying to book demos themselves or whatever.
[00:31:50] So it's like, you know, where this is going to go eventually is. These are not leads. These are signals, which, you know, even setting up the HubSpot integration is too hard in my opinion. I think like what, what, what my goal for this is and what could make it lower churn at some point is if like, you know, common room is like great, but it's like super hard to use and very expensive.
[00:32:14] And like all the 85 percent of the value is like website visitor. And job change signal. And then there's like 15 percent is all these other thousand things you can do that. Like, yeah, I'm sure Webflow gets value out of it, but like, come on, like your average Joe, you know, marketer, like rubbish prints, they're not going to be able to, so I think it's like a zero friction way where, you know, we can basically.
[00:32:42] We're going to try it with a Chrome plugin, but like serve these signals up to people who they're either in conversations with an email or it's in their CRM already. and there's this other problem that I learned about where it's like, what now? And the what now problem is interesting because it's not that people aren't smart enough to figure out what to say to people who hit their website.
[00:33:02] It's like, if you think about my head of sales, Ben Dexter at retention. com, he runs a team, he's trying to close five deals before the end of the month. If you show him three leads, which are perfect, that hit the site for the first time, it's actually a liability, because it's lower priority than anything else he's working on.
[00:33:19] He would like to reach out to them, but he's not just going to put them in some flow, right? Like, if it's a perfect lead, he wants to say something thoughtful, which, like, requires Some sort of contextual research or like five minutes to figure out what to say to each of these people. So I think like the LLMs are like perfect to take that time to zero.
[00:33:39] So my whole hope is we can run our team lean enough so that at our current pricing, if all we wanted you to do was pay for the identity app, we could like do a freemium thing with this Chrome plugin. And if it works the way I'm thinking it'll work. Only thing that has to happen is like the marketer installs it and they get their salespeople to just like plug the plugin in and it starts doing stuff.
[00:34:01] No one has to configure anything. And then it's like, it's like, it like tells you a signal and then it tells you what to tell that person and says, why? Like that to me is like a killer product at like, I mean, it just, freemium and like, it doesn't even cost anything near what these other things do, right?
[00:34:17] Like a 10th of the price of all the other six cents common room user gems, like whatever else. So.
[00:34:24] Toni: can you talk a little bit about How you reached that conclusion, how you reached that analysis? Kind of, what was the process that you were going through?
[00:34:31] Adam: Swallowing my pride and reading these people telling me why my product sucked. But, you know, it's like over and over and over. It's like, oh, we try, you know, I tried to like do this, but I couldn't filter them, you know, it would, somebody telling you you're fat and you got to eat better and work out like over and over and over again, eventually you're like, You know, what, I should probably eat better and work out like a thousand people have told me that
[00:34:54] Mikkel: I think it's probably also better. Like you, you're hearing as the CEO, you're hearing it straight from the horse's mouth versus a bit, a bigger company. Someone, someone in product marketing or whatever might go and conduct the analysis and go back and say, so Adam and Toni, I looked at the churn.
[00:35:08] Here's, here's why people don't, you know, renew. It's like, yeah, yeah, it's just, it's just a CS excuse. No, exactly. So I think that, I can totally see that being the, the. Like being a massive factor in this. But it's
[00:35:20] Toni: also so it's also so crazy that you got that crucial insight from again, like a LinkedIn post.
[00:35:27] And then, you know, lots of
[00:35:28] people answering, you reading that stuff. And you figure out, Oh, wait a minute, those are the three things we need to build and, and also kind of getting the insight of Well, you have obviously a spectrum of companies with traffic on their website, right? There's a spectrum of that from very little or none to like too much. and right now your ICP is just this one mini slice in between that you can cater to because of the missing workflow and routing basically. Right? If you solve that, you unlock, The, the, the ones that have a lot more volume, basically. and you know, once these things are being said out loud, by the way, everyone is like, of course, I mean, duh, like logically, right?
[00:36:07] Why didn't you build this like this from the beginning? But this is exactly this painful process of. of figuring out this product market fit and getting this kind of information from the, the horse's mouth, literally So easily at that scale. That's just fucking magical, by the way. I think this is, you know, people should be jealous.
[00:36:25] But honestly,
[00:36:25] Mikkel: I'm also just thinking, if you got the amount of feedback you mentioned, how do you decide what to listen to and what not to listen to versus what to then do? Because I can imagine that's also difficult.
[00:36:37] Adam: So in, a couple of things that you guys said, there was a strange issue that happened because a fundamental problem we have is that. People are, are giving us feedback on this web, web app that we have. And like me and my co founder, Diana, don't think that the web app is how we want our ICP users consuming the signal, but we're getting feedback on the web app and things people want us to improve because that's what they have.
[00:37:09] Toni: hmm.
[00:37:10] Adam: You know, and they're being presented this product in the way that they're being presented the product. So like they're giving us feedback on how they would like to turn leads into demos using a web app. And like Diana, who runs retention. com, she's like, I have a very, very strong feeling that that is not the most valuable use of this.
[00:37:30] So we kind of had this struggle with our support guy and our growth guy, who are kind of the on the ground product people talking to these customers where it's like, this is what people want. And I'm like, I'm not saying we don't need that eventually, but like. Those will be very incremental changes to this offer.
[00:37:49] Might get our churn to like nine, 8 percent or something like that. Like with what I'm talking about, if we can actually deliver what I'm saying, it is a totally new transformational use of this technology. Right? Like it's kind of what 6Sense did, tried to do, you know, serve me up some leads and, and tell me, you know, and tell me who has your contact.
[00:38:11] So, so yeah, that is just, The conviction that she and I have from talking, I have the conviction from talking to her, it's like, it's our experience building our last company together that like makes it like, it was weird. It was like, it really didn't start taking off until we stopped letting the market decide what to do with the product.
[00:38:33] And we told people exactly what to do. And there were two other vendors selling the exact same thing. They were just letting the market decide what to do with it. Like the day we showed up and we're like, okay, tell me your tech stack. Okay. Here's a checklist. Just do this? Say this, you know, whatever it was just like, so that's kind of where we're at with this.
[00:38:56] Like, I'm so deeply convicted that if we continue to sell leads in demos, we will fail. I mean, what fail, like we'll get to like five, seven, 10 million ARR. Or how, how, how big can you get with 11 percent monthly churn? I don't know.
[00:39:09] Mikkel: Yeah.
[00:39:09] Adam: Not very high, not very big, but like none of these companies are big.
[00:39:12] Right. Cause like none of them really figured this out. Like that it's not, they didn't figure out how to elegantly sort of like get. The value of this to people in a, in a very low friction way. No, nobody has. and by the way, like, I still don't think it's going to be as low churn as a CRM because at the end of the day, it still is just like an intent signal and there's just a lot of reasons why you would turn off an intent signal or a lead source that you wouldn't cancel a CRM,
[00:39:38] Toni: Would you would you actually say you have pro market fit?
[00:39:42] Adam: No, definitely not. Well, I would say we have product market fit
[00:39:45] with our free users, which is not that, I mean, it's helpful for the virality of it, and I would say we actually have decent product market fit with enterprise, which we're not focused on because. There's a lot of reasons why I'm not focused on enterprise.
[00:39:58] I don't think you can focus on both in the beginning. I think it's one or the other. You know, for, we can go into that, but like we've picked. We, we let enterprise inbound us. And if they're willing to deal as they would deal, if they were a small business, like we'll allow them like maybe one mock up if it's like somebody really special, but everybody else were like, here's a super cheap price.
[00:40:18] Here's our MSA, sign it or walk,
[00:40:22] you know, it's like not this whole, what an enterprise sale would be. So, but for who I think this is the most valuable for, we are not even close. In fact, I said it in my last post, it's unusable. It's not that it doesn't have product market fit. They can't even use it, you know?
[00:40:39] Like, so,
[00:40:41] so
[00:40:41] yeah, but,
[00:40:42] Toni: it's it's no, the, the thing is right, because everyone said, I mean, and then I think. This is now, you know, last four years to, to what we're looking at now, but, everyone still says, well, if you hit a million ARR, you have pro market.
[00:40:54] Mikkel: Yeah.
[00:40:55] Toni: Right. And, and, and you got that. Lies.
[00:40:58] Adam: Yeah.
[00:40:58] Toni: So exactly.
[00:40:59] That's, that's exactly my point. Right. And I think in your case, obviously kind of the, the churn number is what should give you pause, and it's definitely giving you pause to try and figure this out. Uh, but that would also be from my perspective, it's like, Hey, wait a minute, if I think the distribution game works fantastically well, right?
[00:41:15] Kind of that,
[00:41:16] that,
[00:41:17] Adam: by the way,
[00:41:17] like,
[00:41:17] Toni: of what, what got you to this so far. Absolutely quickly. but there's something here that on the product market fit side still needs to be kind of tweaked. I mean, and I'm not trying to tell you anything, Adam. I think all of this is clear. I'm just trying to reflect also for our audience here on, there's something that obviously isn't working out right now that needs to be tweaked in order to get to this, to this product market fit thing.
[00:41:38] My, my follow up question on this is actually, you know, it's So you have a couple of convictions now, right? There's something, uh, there's maybe needs to be some expectation management, right? It's not a lead, it's a signal. There's something with the filtering and routing.
[00:41:51] There's something with the what now, right? You have kind of those three convictions around this. and now the team is executing against it. how do you, you know, how do you plan to track against this? Is it, is it only going to be all my churn numbers going down and this is how we're tracking? Or do you have some more detailed stuff behind the scenes in order to be like really You know, not only quantitatively understand that you're improving, but also, Hey, we're getting closer to a little bit of the vision that you're having, right?
[00:42:17] Because it's, it's a mix from, Hey, we got some feedback and this is where we want to take the company and therefore we're prioritizing like this. So it's not only qualitative, quantitative, what you're doing here, right? So how do you track or how do you envision to track, um, you know, those, those hypotheses that you have for them to actually hit?
[00:42:34] Yeah.
[00:42:36] Adam: my goal for this next iteration is to build something that our sales team, if you took it away from them, they'd be like, hold on. No, no, no. Get, we give it, you know what I mean? Like, so we have the luxury of having that. that's, that's step one. The nice thing is, I think at the very worst, we're just kind of where we are.
[00:42:59] And this will stall out at like double or triple the size that it is. That's like, and like, I'm running it as a cashflow business, right? It's so, so it's like, it's the two companies are already in a great spot. If that happens, it's an even better spot. So that's like kind of worst case scenario. If I can actually get something that this team will not let go of, Then I know it works across everyone in everyone in their situation.
[00:43:31] And then I have this incredible ability to have like this, this really high velocity freemium distribution mechanism, and I'm just going to try to get it in everybody's hands. If that doesn't happen back to the drawing board. You know, we have some other ideas of other stuff we could do, but, but I, I will have no problem just like turning that off if it's like, if it's like a nice to have, but, but Diana's literally like, we talk about all the time.
[00:43:59] She's like, if I had what we're talking about, it would, I've had a signal problem for five years and none of the tools on the market. She's like, I'm doing a, I'm doing this common room demo. I literally want 3 percent of what they're talking to me about. But their product is designed to give you a hundred percent of it, you know?
[00:44:17] So, so yeah, the reason we're selling so much is because it's obvious why the website visitor signal is the most valuable signal there is. none of the vendors have set it up to actually get value to the rep
[00:44:31] Toni: I think
[00:44:32] it's a super simple value prop. I think that helps a lot. and I think you, you mentioned it earlier. The magic moment is truly. magic, right? It's kind of different. You, you get, you get to the magic moment really quickly. Yeah. So, so I think that's, that's pretty interesting. I have a last question, but like, no permitted, you're allowed last
[00:44:51] Mikkel: question.
[00:44:51] Toni: So, so this is actually kind of also the, the, the finishing question uh, just wanted to kind of jump to one other mini topic in the end. So we focus on this churn thing. and I'm not sure how you're gonna, I'm really interested myself, how you're going to answer this.
[00:45:05] So we talked about the six cents, beef that was going on, which was Back then I discussed it with someone and we called it confrontational marketing.
[00:45:15] Basically saying like, Hey, you know, Salesforce, Mark Benioff did this, you know, drift did it, you know, uh, David Cancel, uh, and Gerhardt kind of did this to a degree like no forms. So that people know this works. Right. My question, Adam, the same, so you had also confrontation with Mark Kosoglow. was this planned kind of, did you have a Mark call and like, Hey, Mark, you want to launch this company? I want to kind of drive this thing up. This confrontational thing works really great. Should we get, should we get into a fight publicly?
[00:45:49] Yeah, let's do like
[00:45:50] Mikkel: Mark and
[00:45:51] Adam: yeah. I'll tell you what happened. We were on this webinar together, Jason Bay, who's a sales trainer. We were on his webinar and Mark just like said some stuff that I didn't like. He was like, I was like talking about, you know, this founder. So he's like, Oh, everybody's going to copy that. And it's going to stop working.
[00:46:08] I was like, no way, man. If everybody copies it, like they can't, right? Like no one can, like, there are a lot of reasons why. CEO cannot talk about his churn publicly, right? Like that's just, that's the reason why no one does. There's a lot of reasons why you can't, right? you don't want to, but even if you did, your investors would be like, are you out of your fucking mind?
[00:46:30] Like you're going to like blow the odds of us doing another round by
[00:46:33] writing this. Right. So there's a lot of reasons why people can't write what I'm writing. anyway. I had an issue like that, dropped a post about it. Then he's like, he's the guy who's like inbound, let outbound, you know, it's stupid.
[00:46:44] It's not a thing or whatever. So like, I had another post about that. And then he started writing back at me and we went, we went back and forth five or six times. And then I was like, dude, you want to try to like duke it out publicly? And he's like, fuck Yeah. And then it started not getting, and then it started not getting as good. like it was better before we coordinated anything. It was like, it was like we coordinated. And then there was like, he did one, then I did one that was like really good. And then he followed it up the next day and everybody was like, you guys are playing in this, you know? And I was like, I was like, dude, we just, you know, there's a cadence thing.
[00:47:23] There's like, whatever. So. and then I had him on my show and like on social media, it's like so easy to just talk past each other. You know, it's like bootstrapping is harder. It's like, you know what I mean? And then you get on a show and you start actually, he's a very reasonable and intelligent dude, right?
[00:47:41] Like everything he's saying is true and correct. And everything that I'm saying, even though it's the opposite is also true and correct. So it wasn't, it wasn't,
[00:47:52] a good show. It wasn't what people wanted. Right. Like, but you know, yeah. So that's the story there.
[00:47:58] Confrontation works. I kind of wish we hadn't have coordinated anything.
[00:48:02] Cause it would have probably kept going, you know,
[00:48:05] Mikkel: I was just gonna say, it's like when we try and coordinate intros, they also kind of suck. So that's, uh, that's how it is.
[00:48:11] Adam, thanks so much for hopping on the show, enlightening us and being so transparent. if you, the listener, haven't, uh, seen Adam yet, check him out on LinkedIn. There's a ton of great posts, uh, I definitely recommend to check out.
[00:48:23] We'll add them, I think, in the show notes. And check out Rb2b. Please do. Adam, thanks so much for joining. Bye.
[00:48:29] Adam: thanks guys.